Economic and trade cooperation has long been a bedrock of and stabilizer in China-US relations. However, in the several strategic documents issued by the US government since late 2017 -- including the National Security Strategy, the National Defense Strategy, the Nuclear Posture Review and the 2019 National Defense Authorization Act -- China and Russia are identified as "strategic competitors".

A "whole-of-government strategy on China" was unveiled, unleashing signals that the US would perceive of major countries as competitors and would engage in strategic confrontation around the world.

In 2018, China-US trade frictions escalated into a fierce game, interwoven with issues of high-tech sanctions, the South China Sea, Taiwan and Tibet. Strategic competition between China and the United States has become an undeniable fact, and some scholars even scream about "the new Cold War".

It was a critical moment, then, when Chinese President Xi Jinping and American President Donald Trump met during the G20 Summit in Buenos Aires at the end of 2018 and reached important consensus on halting new tariffs and starting a new round of trade negotiations. The yearlong trade friction came to a suspension thanks to the efforts of both heads of state, easing the nerves of all for the time being. But most critics tend to be pessimistic, believing this is just a cease-fire instead of an end of the war. Some even take gloomy views about the prospects of the trade talks.

Among doubtful eyes from every direction, a vice-ministerial-level telephone conversation was held on Jan 4, 2019, saying that both sides will work hard to carry out the important consensus reached at the Argentina summit and that positive and constructive talks will be held. On Jan 7, Jeffrey Gerrish, the deputy US trade representative, and a delegation arrived in Beijing for talks. Judging from responses of various parties. It seems that the two countries might be sending out signals of win-win cooperation to the world.

In fact, people at both sides of the negotiating table are well aware that in the four decades since China and US established official diplomatic relations, some fundamental changes have taken place. China has become the world's second largest economy only after the United States, which has brought bilateral ties to a new era. In this era, the China-US relationship cannot return to the old track as they have done for the past 40 years when they either faced common strategic threats or global challenges arising from various corners of the world.

In such context, the biggest challenge for the bilateral relations does not come from any third party, but from the two themselves. However, to acknowledge the rivalry is not a bad thing -- it means the two need to respect each other, and set limited goals in strategic competition instead of pursuing unlimited targets beyond their own capacity.

In this sense, the greatest significance of China-US resuming the talks is that both have come to realize that they can only hope for reasonable and attainable goals.

This is of vital importance to maintaining bilateral ties. Both have taken a prudent approach, which could be seen from the fact that the current talks are being held at merely the vice-ministerial level. The level of the talks predicts the limited consensus, and breakthroughs could only be expected in such areas as agriculture and energy. Substantial talks and agreements will require negotiations at a higher level.

There is another propeller driving the two countries back to the negotiating table: market expectations and people's aspirations.

Public attitudes unchanged

While commentators and capital markets across the world all seem worried about China-US relations, the public of the two countries show a quite stable attitude.

In contrast to the shifted view of American elites, the American public perspective on China is very stable. In an opinion poll conducted by the Chicago Council on Global Affairs in 2018, the American people gave China 45 points out of 100, while this number was 44 in 1978. As to the question of whether competition or cooperation will be the mainstream of China-US relationship, the American public view is divided: 49 percent opt for rivalry while 50 percent believe cooperation will prevail in the relationship.

In general American people do not think that the rising Chinese economic strength poses a serious threat to the United States. What they complain about is the belief that China is being an unfair trading partner.

A thorough analysis of Chinese people's opinion of the United States leads to similar findings: Most ordinary Chinese people do not regard the US as a threat; what they're dissatisfied with is its hegemonic and unilateral actions in the international community and the unfair treatment of China through US-dominated international rules.

Obviously, the core of China-US competition in the new era is the making of rules for allocating global resources. The key to solving China-US trade frictions lies in establishing an international system of rules that seems fair to all parties.

In this sense, China-US trade frictions may only be a prelude to the China-US debate on WTO reform. The real game will concern WTO reform, and this may be the highlight of China-US relations in 2019. China-US trade talks should follow the aspirations of the people, reduce as much as possible the negative impact on market confidence, limit the harm to common interests of the two peoples and focus on the reform of WTO game rules. This is what both Chinese and American people hope for in the new era.

The author is the director and professor of Department of International Relations, Tsinghua University. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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